Is the lien recorded, or just asserted? If they just SAY there is a lien and it is not recorded, go for it. I recently bought a property from a friend whose nursing home care was being paid for by Medicare. I assisted him to instantly roll his cash over into an installment note (NOT a CD, a note, which has no redeemable cash value, so far as Medicare is concerned), which they cannot claim. If the monthly income is above their minimum, they may claim the excess–ask an attorney who deals with issues for the elderly, as I did. The upshot was, he got more income than he ever had in his life, I got a positive cash flow property, and the old man was found INeligible for his medicare benefits. BUT, since he bought the installment note just two days after the money was his from escrow, he was inelible for ONLY those two days. After some discussion with his social worker, his care never missed a beat. (The social worker was irate for a while, wonder why.) The key for you is, is the lien recorded?
I have made a cash offer on a property. The house has been vacant for two years. The owner is in a nursing home.
Medicaid has a lien on the house. The offer is 50% less than market value. If the offer were accepted, I understand
the nursing home resident/children would be responsible to pay for the difference. Has anyone had any experience with
such a situation?
Have you pulled the lien on the property to see what the lien amount is? It seems odd that a nursing home can place a specific dollar amount on the property when they, nor anyone else can determine exactly what a property will sell for. What will typically happen is that when the house is sold, Medicaid will swoop-up whatever amount the house sells for and apply it to the resident’s monthly room and board. Once their personal assets have been depleted, Uncle Sam picks up from there.
What you might do is purchase the property at or near FMV, then have the seller’s hold the a long-term mortgage at a low interest rate. My theory is that if the seller sells the property at or near FMV, and holds the mortgage at a “fair” (low) interest rate, spread-out over many years, there is nothing Medicaid can do other than wait for the check each month. In the mean time, it’s no skin off the owners nose because it’s all going to the nursing home anyway. You could always keep the family on your holiday gift list each year for working with you!
While I haven’t done this yet, I do have a prospect that I may try this with. There are two things you do want to be careful of and that is that you do not want to do anything that can be construde as Medicaid Fraud. It’s will only land you in jail. Secondly, I’m not sure if Medicaid has the right to force the sellers to sell the mortgage off. Even if they do, the terms are already set.